Topshop used to be the crown jewel of British fashion group Arcadia but it became the latest victim in the group's administration crisis.
Arcadia Falls Into Administration
The British fashion group Arcadia fell into administration earlier this week following a lackluster 2020, going from a market share of around 4.5% five years ago to 2.7% this year.
While COVID-19 had something to do with the fall of what could have been one of Britain's most successful fashion chains, experts believe a factor in the company's fall was its fixation on bricks-and-mortar retail.
As many retailers went digital, Topshop remained focused on its high street shops and maintained centralized operations on physical retail.
Topshop has more than 300 physical stores across the UK, while its rivals such as Intidex built only more than 100 stores in the country.
The surge of physical retail was all good before the pandemic but the health crisis proved to be a thorn for the brand that refused to capitalize on the booming online retail market.
Arcadia also owns Dorothy Perkins and Miss Selfridge but Topshop was its cash cow. With Topshop's trivial investments on digital offerings, Arcadia gradually fell behind the retail industry's online craze.
Philip Green Accused Of Racial And Sexual Abuse
In 2018, Topshop owner Philip Green was accused of making racist remarks, physical aggression and groping female workers.
Sales soon took a hit as the Topshop-mania crumbled and shoppers called for a boycott. The Daily Telegraph published a report of the allegations to which Green responded with legal action but he dropped the case soon after.
According to the paper, Green denied racist behavior. There was also the allegation that Green called a senior female executive a "naughty girl" and groped her. They said the female executive was allegedly paid more than 1 million pounds ($1.3 million) to stay silent.
In late May last year, Green was charged in the U.S. for assault accusations against a Pilates instructor. The charges were dropped earlier this year but the fashion market and women's rights advocates continued to call for a Topshop boycott.
Arcadia Crumbles
Around two years after the first allegations of Green's conduct emerged in the public, Arcadia sought creditor protection this week as around 13,000 jobs have been put in the balance.
Deloitte said in a statement Monday that Arcadia's stores will continue to operate and no redundancies will be announced just yet.
Before the bankruptcy filing came, Arcadia slashed 500 head office jobs. Analysts said that even before COVID-19 hit, the fashion group was already struggling to keep sales up, with Topshop not being able to save the business from its fall.
